Sun | Mar 26, 2017

Putting people first

Published:Sunday | August 24, 2014 | 8:00 AM
Dr Damien King, head of UWI's Department of Economics, has come in for licks from In Focus analyst Ian Boyne two weeks in a row. - File
A labourer pushes a trolley with trays through driving rain in downtown Kingston. Columnist Ian Boyne is a big critic of neo-liberalism, which puts too much attention on interest rates, inflation and debt management than indices like employment. - Jermaine Barnaby/Photographer
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Ian Boyne, Columnist

There is this commonly accepted notion that people should pull themselves up by their own manufactured bootstraps; that nobody or no institution owes them anything, no matter how poor and vulnerable they are. They must fend for themselves in a free market, and any other notion is just an encouragement of 'slackness' and irresponsibility. No 'nanny state' should be fostered.

This notion is roundly, profoundly and rigorously rejected in the recently released Human Development Report, published by the United Nations Development Programme (UNDP). Titled Sustaining Human Progress, Reducing Vulnerability and Building Resilience, the 2014 Human Development Report makes an impassioned plea, backed by solid empirical work, for the universal provision of services to protect the vulnerable.

"The case for universal provision of basic social services rests first and foremost on the premise that all humans should be empowered to live lives they value and that access to certain basic elements to a dignified life ought to be delinked from people's ability to pay." That notion is challenged by the Social Darwinistic view which is inherent in neo-liberal economic thinking. Neo-liberalism is not just an economic system. It is a philosophical system, a way of viewing the world. It is an ideology.

Reducing vulnerabilities

Our decisions as a society cannot be just determined on the basis of efficiency, pragmatism and instrumentalism. Indeed, we must promote efficiency, fiscal prudence, and debt sustainability. But that can't be at the expense of putting people first and keeping in mind what is the point of all development.

Says the report: "Reducing vulnerabilities calls for renewing the core message of human development as 'putting people first' ... . All public policies, especially macroeconomic ones, must be seen as a means to an end, not as ends in themselves. Policymakers must ask basic questions. Is economic growth improving the lives of people in areas that really matter - from health, education and income to basic human security and personal freedoms? Are people feeling more vulnerable? Are some people being left behind?"

These are the questions we need to ask in Jamaica. Unfortunately, we are increasingly taking an economistic approach to development. Financial analysts and other commentators speak narrowly about achieving certain macroeconomic targets, overlooking broader developmental issues. The magic of the market is promoted over the real, concrete needs of people. The market and the people need not be at variance: Indeed, market mechanisms are needed to unleash people's creativity, innovativeness and productivity. Let me make it clear: The market is essential to advancing people's interests, but it can't be a magical, chaotic market.

In the thinking of neo-liberals, more attention is given to interest rates, inflation and debt management than to employment, for example. Says the report: "Full employment, as an objective, was central to macroeconomic policies in the 1950s and 1960s. It disappeared from the global agenda during the stabilisation that followed the oil shocks of 1973 and 1979. It is now time for a return to that commitment ... ." Among the threats to full employment, the report finds, is globalisation as well as "the strong belief in self-correcting markets and in macroeconomic policies that focus more on price stability than on full employment". Unemployment increases people's sense of vulnerability.

"Jobs foster social stability and social cohesion, and decent jobs strengthen people's abilities to manage shocks and uncertainty. Yet few countries, developed or developing, pursue full employment as an overarching societal or economic goal. Expanding jobs should guide public policy." The UNDP recommends - though Dr Damien King would recoil from this - that temporary employment schemes and expanded public works programmes, including cash for work for the poor and unemployed, be adopted.

Handling underemployment

The report continues by noting: "For developing countries faced with challenges of underemployment, active labour market policies are not enough ... . Pursuing full employment requires polices that promote job-creating growth and that extend a social protection framework for all in both the formal and informal sectors." And, alarming to Dr King is, no doubt, this statement: "This may entail macroeconomic policies that go beyond an exclusive focus on price stability and debt management."

Interestingly, industrial policy in East Asia is cited in a special section as contributing to its success in job creation. "State-led industrial policy created the conditions for labour to transition to more productive, higher value added and fairly formalised employment outside agriculture. State ownership of the banking sector in the Republic of Korea and China called for the financing of industrial policy and employment-generating activities such as infrastructure construction, neither of which is necessarily profitable in the short term. Trade, macroeconomic and financial and industrial policies all increased the quality and quantity of jobs. Fiscal polices were similarly directed toward employment creation." This has to be done in Jamaica if we are to significantly boost employment. We can't rely on the magic of the market alone.

Another area in which the 2014 Human Development Report clashes with a growing neo-liberal, Washington consensus view is its advocacy of universal provision of services, as opposed to targeting, which is now the favoured view. For example, the private-sector working group on taxation has strongly recommended that Government remove GCT exemption from certain basic goods and have targeted programmes for the poor and vulnerable. I have raised firm objections to this in the past, pointing out how difficult it is in our context of bureaucratic inefficiency and corruption to successfully implement such a targeted system.

Private-sector people have pointed out that when Government subsidises basic foods, rich people get that subsidy, too, while it would make better sense to save that money spent on the rich to have targeted PATH-type programmes. But the report rejects that reasoning and challenges its empirical grounding.

The report notes: "Recent decades have seen a global shift in the politics of social spending, changing emphasis from development to poverty alleviation. As a result, there has been greater stress on targeting social spending for the poor rather than for all. Targeted services were considered more efficient, less costly and more effective in ensuring redistribution. But historical evidence presents a more nuanced picture. Universal provision has, in many instances, been associated with greater poverty reduction, greater redistribution and lower inequality."

And this is another important pointed noted by the report: "Universal policies also promote social solidarity by avoiding the disadvantages of targeting - social stigma for recipients and segmentation in quality of services as well as failure to reach many of the vulnerable." And the report makes the point that: "One commonly held misconception is that only wealthy countries can afford social protection or universal basic services ... . The evidence is to the contrary. Except for societies undergoing violent strife and turmoil, most societies can - and many have - put in place basic service and social protection." Free education and free health care, enacted by the previous Jamaica Labour Party Government, have been among the most important of social-protection measures adopted here. The People's National Party foolishly opposed them and even threatened to reverse them, but good sense and expediency have made them back off that position.

Universal social protection

Sustaining Human Progress, Reducing Vulnerabilities and Building Resilience makes an important philosophical point justifying the provision of universal social protection: "While ways of delivering such services may vary in circumstances and country context, common to all successful experiences is a single idea: The State has the responsibility to extend special services to the entire population, in a basic contract between citizens and State."

Unfortunately, there is almost no independent voice in Jamaica these days pushing this view, with neo-liberalism having squelched all other opinions and once-progressive tongues are now silent. Our economics department at the UWI, once a bastion of progressive thought, has been totally captured by neo-liberals. Civil-society groups are riled up over security issues, but couldn't care less about economic and social rights. They would do well to heed the words of Pope Francis, who said, "Human rights are violated not only by terrorism, repression or assassination, but also by unfair economic structures that create huge inequalities."

Ian Boyne is a veteran journalist working with the Jamaica Information Service. Email feedback to columns@gleanerjm.com and ianboyne1@yahoo.com.